What Is Long-Term Care Insurance?
Essentially, long-term care insurance provides financial protection should you become unable to care for yourself because of a chronic illness; disability; cognitive impairment, such as dementia; or other age-related conditions preventing you from managing a number of the activities of daily living without assistance. It can cover stays in nursing homes and chronic care facilities or the services of a caregiver in your own home.
Generally speaking, there are two types of long-term care insurance plans:
One reimburses you for eligible expenses that are outlined in your plan (such as homemaking or private nursing services) that you may incur on a given day, up to a pre-determined maximum.
The other is an income style plan, which offers a pre-determined monthly benefit amount.
With an income-style plan, the regular benefit you receive (e.g., monthly, weekly) can be spent any way you choose. You can use it to help finance your care in a residential facility, for in-home care services or to pay someone in your own family to look after you.
Most plans include a waiting period. This means once you qualify for benefits, you must wait a specified period of time before your benefits will be payable. Common waiting periods are between 30-90 days.